Chinese e-commerce giant Alibaba said it will comply with U.S. regulators and work to maintain its listings in New York and Hong Kong.
“Alibaba will continue to monitor market developments, comply with applicable laws and regulations and strive to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange,” it said in a statement to the Hong Kong bourse on Monday.
The statement came after Alibaba was added to the U.S. Securities and Exchange Commission’s list of Chinese companies at risk of being delisted for not meeting auditing requirements on Friday. As a result, U.S.-listed Alibaba shares plunged 11% in the Friday trading session.
Under the Holding Foreign Companies Accountable Act law, the SEC identifies public companies that have retained a registered public accounting firm to issue an audit report where the firm has a branch or office.
On Monday, Alibaba said it was added to the SEC’s list, indicating its audits for the fiscal year ended March 31, 2022 could not be fully reviewed by the U.S. Public Company Accounting Oversight Board.
Under the HFCAA, if the PCAOB cannot fully inspect audits of a U.S.- listed company’s financial statements for three consecutive “non-inspection” years, the SEC is required to bar the company’s securities from being traded on U.S. markets.
Last week, the Chinese tech giant said it will apply for a dual primary listing in Hong Kong. The tech giant’s shares are already traded on both U.S. and Hong Kong exchanges, but the current listing in Hong Kong is a secondary one.
The primary listing process in Hong Kong is expected to be completed before the end of 2022, the company said in statement.
— CNBC’s Abigail Ng contributed to this report
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